I’m joining in the 12 days of Christmas - Personal Finance Style with day 7.
On the 7th day of Christmas, my true love gave to me…
Seven tips when you’re swimming (in credit card debit). When you find yourself deep in credit card debt you need to take action. Here are seven immediate steps you can take to get you on your way to being debt-free,
1. Put the credit cards down and back away slowly. Stick them in the freezer, bury them in the backyard. Just stop charging your credit cards.
2. Take care of your 4 walls first. What are your 4 walls?
I learned of the 4 walls idea from Dave Ramsey (author of The Total Money Makeover). The idea makes sense, when you are in over your head with debt you need to make sure your basic needs are met. Then start attacking the debt.
3. Make a list of your debtors
Who do you owe money too? And how much? Make a list that includes all your debts, total amounts, minimum monthly payment and phone numbers to contact them.
4. Make payment arrangements
After making a budget are you not able to make the minimum monthly payments? Call the companies and see if you can reduce the amount you pay each month.
5. Reduce the Interest
While your on the phone with the credit card companies see if they’ll reduce the interest rate on your accounts. It’s worth a try, and if they say no see about transferring the amount owed to another card with a lower interest rate while you pay off your debt.
6. Make a Budget
Ok, you know what your 4 walls are and how much you need to take care of them. Now you need to make a budget, Write EVERYTHING down. Plan for every dollar of your budget to go somewhere.
7. Cut your expenses
Now is the time to cut out all the extras. Netflix, digital cable, the lawn and maid service? Cancel them all. You need to get serious. You will be able to throw all the money saved at your debt and get it paid off sooner.